: ‘It’s been a bloodbath’: Long-term bond ETFs deepen losses after hotter-than-expected jobs report

by | Oct 6, 2023 | Stock Market

Exchange-traded funds that buy long-term bonds deepened losses on Friday, as investors weighed a U.S. jobs report that was much stronger than Wall Street anticipated. Shares of the battered iShares 20+ Year Treasury Bond ETF
with $38 billion of assets under management, fell 1.2% on Friday, according to FactSet data. The ETF has lost 12.7% this year on a total return basis. 

Bonds have been under selling pressure, with yields recently soaring as they continued their 2023 march higher on Friday. Longer-term bonds have been particularly hurt in the selloff. “The path of least resistance continues to be higher for long-term Treasury yields,” said Yung-Yu Ma, chief investment officer at BMO Wealth Management, by phone Friday. “It’s been a bloodbath” for investors who bought long-term Treasurys ahead of their recent yield surge, he said. BMO Wealth Management has been recommending to clients this year to buy short-duration Treasurys, according to Ma. He said he’s favored the iShares 1-3 Year Treasury Bond ETF, which trades under the ticker SHY. The fund has outperformed long-term Treasury bond ETFs so far in 2023.  “We’ve been concerned about the prospect of longer-term yields spiking, which they have,” Ma said. He has prefe …

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